Good day, everyone, and welcome to EOG Resources Encino Acquisition Conference Call. As a reminder, this call is being recorded. For opening remarks and introductions, I'll turn the call over to EOG Resources Vice President of Investor Relations, Mr. Pearce Hammond. Please go ahead, sir. Good morning, and thanks for joining us. Earlier this morning, we issued a press release announcing a definitive agreement to acquire Encino Acquisition Partners from the Canada Pension Plan Investment Board and Encino Energy. For convenience, the company and acquisition will be referred to as Encino or the Encino Acquisition for the remainder of this call. Slides containing additional details have been posted to the Investor Relations section of our website, and we may reference certain slides during today's discussion. A replay of this call will be available on our website beginning later today. As a reminder, this conference call includes forward-looking statements. Factors that could cause our actual results to differ materially from those in our forward-looking statements have been outlined in the press release, slide presentation, and EOG's SEC filings. In addition, the reserve estimates on this conference call include estimated resource potential not necessarily calculated in accordance with the SEC's reserve reporting guidelines. Participating on the call this morning are Ezra Yacob, Chairman and CEO; Ann Janssen, Chief Financial Officer; and Keith Trasko, Senior Vice President, Exploration and Production. Here's Ezra. Thanks, Pierce. Good morning, everyone, and thank you for joining us. We are extremely excited to announce the accretive acquisition of Encino, a leading producer in the Utica play with a high-quality acreage position and track record of strong operational performance. I want to thank the entire Encino team for their hard work in assembling a large-scale, high-return asset base. We look forward to building on their legacy of achievement. EOG is acquiring Encino for a total consideration of $5.6 billion, inclusive of Encino's net debt. EOG expects to fund the acquisition through approximately $3.5 billion in debt and approximately $2.1 billion in cash on hand. Most important, we are not using any equity in the transaction. The acquisition is 10% accretive on an annualized basis to 2025 EBITDA and 9% accretive on an annualized basis for both cash flow from operations and free cash flow. We expect the transaction to close in the second half of 2025. After closing, we will continue to have the strongest balance sheet in our peer group, underscoring our relentless focus on capital discipline. At a high level, we are acquiring 235,000 barrels of equivalents per day of production, 675,000 net acres, greater than 1 billion barrels of equivalent oil production of undeveloped net resource, and 55 net ducks in inventory. We are excited to execute on this unique opportunity that is immediately accretive to our per-share metrics and meets our strict criteria for acquisitions: high-quality acreage with exploration upside, competitive with our current inventory, gained at an attractive price. Our ability to execute on the Encino acquisition without diluting our shareholders is a textbook example of how EOG utilizes its industry-leading balance sheet to take advantage of countercyclical opportunities to enhance the returns of our business and create long-term value for our shareholders. This acquisition is more than a timely opportunity. It represents a strategic advancement in the deliberate and methodical process that EOG has taken to study the Utica and apply our operational excellence to build a high-quality, low-cost position through a combination of organic leasing, small bolt-on acquisitions, mineral purchases, and finally, a large transformative acquisition. This strategic move not only strengthens our presence in the Utica but demonstrates our confidence in this high-return asset to create long-term shareholder value. The Encino acreage fits hand in glove with our existing Utica acreage and enhances our size, scale, and returns in the play, establishing the Utica as a foundational pillar of EOG's top-tier multi-basin portfolio. The combined Utica position provides significant economies of scale with 1.1 million net acres, more than 2 billion barrels of equivalents of undeveloped net resource potential, and 275,000 barrels of equivalents per day of production. We are excited about the significant opportunities to enhance the acquired assets by leveraging our in-house technical expertise, proprietary information technology, and self-sourced materials. These resources are instrumental in driving improved well performance and reducing well costs. Other opportunities include longer laterals, shared facilities, reduced G&A, and applying our optimizer technology across existing production, as well as marketing opportunities to take advantage of higher production levels, driving improved realizations. Due to these factors, along with lower debt financing costs, we expect to deliver more than $150 million of synergies in the first year, and we have line of sight for those to grow over time. I'm pleased to highlight three strategic achievements from our recent acquisition that significantly enhance our growth trajectory. First, we will increase our average working interest by more than 20% in our northern Utica acreage, a region where we have consistently delivered outstanding well results. Second, our acreage in the liquids-rich volatile oil window will nearly double to 485,000 net acres, positioning us for enhanced production capabilities. Third, we will acquire gas production of approximately 700 million cubic feet per day, supported by firm transportation agreements that channel this gas to premium end markets, ensuring optimized revenue streams. The Encino acquisition substantially increases EOG's ability to boost returns and capital efficiency. This acquisition is not merely about scaling up; it's about enhancing the quality and depth of our portfolio. Encino's assets will seamlessly integrate into our existing operations, competing effectively for capital within the EOG portfolio. Combined with our existing Utica position, the Encino acquisition strengthens one of industry's most diverse, high-return, and deep multi-basin portfolios, encompassing over 12 billion barrels of oil equivalent of high-quality net resource potential. This robust resource base positions EOG for sustained long-term growth and value creation. True to our long-term track record of rewarding shareholders, we are increasing our regular dividend by 5%, reflecting the improvements in our business and the confidence in this acquisition. We expect to continue delivering robust cash returns to shareholders, anchored by our regular dividend and supplemented with opportunistic share repurchases. We expect the percentage of free cash flow returned to shareholders to be similar to what we have delivered over the past several quarters. To wrap up, I want to emphasize EOG's value proposition and that the Encino acquisition supports and enhances this value proposition. We're committed to sustainable value creation throughout the industry cycle, driven by a disciplined focus on high-return investments, optimizing both short and long-term free cash flow, along with a pristine balance sheet and strong regular dividend that sets us apart from our peers. Our operational excellence, combined with our dedication to sustainability, is fueled by EOG's unique culture: a decentralized, collaborative approach that drives innovation at the asset level. Thanks for listening. Now we'll go to Q&A. Thank you. The question-and-answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your touch-tone phones. If you are using a speakerphone, we do ask that you please make sure your mute function is turned off to allow your signal to reach our equipment. You are allowed one question. If you do have a follow-up, you may re-queue. We will take as many questions as time permits. Once again, please press star and then one on your touch-tone telephone to ask a question. To remove yourself from the queue, you may press star and two. Our first question today comes from Josh Silverstein from UBS. Please go ahead with your question. Yeah, thanks. Good morning, guys. Encino was pretty active this year. I think they were running three or four rigs and putting on a lot of wells this year at a faster pace than you guys. Is the game plan to keep their activity pace, or are you going to slow it down? How does this get integrated with your program? Thanks. Yes, Josh, this is Ezra. Thanks for the question. Yeah, Encino's currently running three to four rigs and two completion crews, as you said. For the balance of the year, basically, we anticipate layering the activity on top of our planned activity of one rig and getting to two by year-end, along with one completion crew. We plan to wait for the deal to close before providing information regarding planned activity for next year. Really, you can continue to think nothing's really changed with EOG's approach. The focus is on capital discipline. That governs our go-forward activity, and we'll continue to manage activity levels at a pace that drives continued improvement at the asset level. The exciting thing for us is, with this transaction, we're really moving the Utica position from being an emerging asset into one that can easily scale up and handle more activity as it's become a real foundational core asset for the company. Our next question comes from Stephen Richardson from Evercore ISI. Please go ahead with your question. Morning. Thanks, Ezra. I was wondering, you've held yourself to this 250 and I believe 45 threshold for your investments organically. Can you talk about how you thought about that as you looked at an inorganic opportunity? I would assume that sellers of assets are anchored on the forward curve. Can you maybe just talk about your EOG's view on kind of the gas-oil ratio and how that drives future reinvestment opportunities. Yes, Steve, thanks for the question. We continue to use $2.50 as the bottom cycle pricing mechanism for the way that we measure our investments, and especially our direct wellhead rates of return. As you know, we've also started to look at mid-cycle pricing as well. When we look at the gas returns of this asset, the wellhead returns, the direct side of that, it's very close to the hurdle rates that we like to see at the bottom cycle pricing, and we see significant upside on the gas play here. It gives us a strong option. I think the thing we really like about the basin is that, as we've seen, the cost structure is very favorable for an operator like us, where we can apply some of our technology to drill longer laterals, be able to add some of our supply chain and logistics strengths, and then some of the things that we do on the mechanical side as far as proprietary technology, utilizing things like EOG mud bits, cutters, and even some of our motor program. The other thing that we like about the gas window here is we see upside on the production side by applying some of the learnings that both Encino and EOG are recognizing with recent wells in the liquids-rich window. We think we can apply that to the gas window and increase productivity there as well. Of course, we can apply some of our production enhancement tools. We've talked about these before as our optimizers. This is technology that we use in all of our basins. We've been introducing it into the Utica, and we see that applying that to a rich PDP base like this should deliver significant upside. We continue to look at the well results in 250 and 45 hurdle rate. As far as alignment of stakeholders and where you find value between it, I think EOG and Encino, as you look at our acreage footprint, you can see that we've got a lot of overlapping acreage, and we are two companies that have been working together on this play for the years that we've been involved in it. I think there's a lot of alignment, a lot of strategic alignment between the two companies. We both found ourselves at a point where it made a lot of sense going forward to consolidate these positions and be able to drive value for the shareholders out of it. Our next question comes from Arun Jayaram from JPMorgan. Please go ahead with your question. Ezra, how are you? I wanted to get your thoughts on what you view as kind of the PDP value of Encino. On first blush, it does appear that the PDP value would cover the bulk of the acquisition costs, at least on our quick math. Maybe a sense of maybe the un-drilled inventory potential. You cited a billion barrels of undeveloped net resource. I want to know how many sticks you think you've acquired here. Yeah, Arun, thanks for the question. I appreciate you pointing that out. I think we landed at a great value for this asset. What makes us excited about it, the PDP comes at good value, but we're very excited about the upside to it. As I said in the opening remarks, we've essentially doubled our acreage position in the volatile oil window. We talked about adding a billion barrels of equivalence resource. I think we put some numbers in the deck there with regards to working interest and NRI so that you can kind of narrow in on it with the gross EURs as well for the volatile oil window and the gas window. Pro forma, it delivers the company two billion barrels of equivalence. It slides right into our corporate-level inventory at a spot where you can see it's very additive to the returns profile of the company. We couldn't be more excited than to, like I said before, turn this emerging asset into a foundational play for the company. Our next question comes from Leo Mariani from KeyBank. Please go ahead with your question. Yeah, hi. I wanted to just dive into a couple of the numbers that you guys referenced a bit here. On the synergies, you guys talked about removing some G&A. Are you guys layering in some G&A from the employees here from Encino? You guys also talked about some assumed debt. Can you provide a little bit more color on kind of how much debt is included in the $5.6 billion that you're assuming, and is there kind of a rough interest rate on that? Yeah, Leo, thanks for the questions. Let me start with it, and I'll hand it over to Ann to really dig into the debt for you. Yeah, as far as the synergies go, I mean, there's probably some overlap there with G&A, obviously, because our acreage footprint overlaps with Encino, but that's really less of what we're talking about. To be perfectly frank, when we think about synergies, if we start with just logistics and planning, things like that, this talks about being able to save on pad locations, sharing pad locations. It talks about using the scale of our assets to be able to locate our locations and our infrastructure to reduce equipment moves. We can share between gathering systems, shared facilities, and even manage our midstream assets as well. On the operations side, I mentioned a few minutes ago on the capital side, on the well cost, utilizing EOG technology at scale, whether it's our cutters or bit or mud program. There are obviously supply chain things like sand sourcing, water recycling. We can certainly drill longer laterals with the way that the acreage footprint comes together. Lastly, like we talked about, applying some of our production optimization techniques, really bringing some of our data expertise and technologies from outside of the basin into the basin and using it at scale. Those are the actual tangible assets where we really see a significant upside in the synergies that we're talking about. Ann, if you'd please address the financing side. Yeah, if we look at the notes that we're assuming from Encino, they do come in at a significantly higher rate than EOG carries on our debt. We're assuming about $1.7 billion in debt. The redemption of those notes and the payoff of the loan from the credit facility will take place in conjunction with the closing process. Our goal is to pay those off at the time of closing. We're going to continue to look when we're going to access the debt markets as part of financing this transaction. We have several options. Of course, we can utilize cash on hand. We can access our credit revolver. We do have a committed financing put in place as part of this transaction. We're just going to watch the market and move at the appropriate time to get the right rates to put in place for EOG. Our next question comes from Paul Chang from Scotia Bank. Please go ahead with your question. Good morning. Thank you. When I'm looking at some third-party data, it seems like the Encino well production is a little bit lesser than you guys on a per-foot basis, and that the propensity is higher. The lateral length is shorter. In the meantime, the well cost is higher despite that they have far more gas production, which typically means it's going to be lower in unit cost. Also, just curious, is it all just because of their completion design, or is there something related to the asset quality? How quickly do you think you can bring their cost structure to the EOG legacy level? Thank you. Thanks, Paul. Yeah, we're very confident that we can bring the EOG cost structure to the Encino acreage. In fact, I think what really increased our confidence in this transaction is being able to kind of see behind the curtain and see what Encino's been able to do with their recent wells, where they're making increased productivity improvements and driving down their well cost as well, utilizing some of the things that we've talked about. As far as the gas mix, they do have a larger proportion of dry gas acreage exposure than what we have in our portfolio. I'd point out that what's really driving the excitement on this transaction is their volatile oil window acreage, their liquids-rich acreage, where, as I said in the opening remarks, we're nearly doubling our exposure to that. As a benefit, as upside, we're actually gathering or gaining exposure to premium gas play that comes with the ability to drive down costs. I think we see the ability to increase production. It gives us exposure into new markets. Encino's done a good job kind of capturing diverse markets where they can get premium pricing for the gas. Our next question comes from Doug Leggett from Wolfe Research. Please go ahead with your question. Thanks. Good morning, Ezra. Compelling logic. Congratulations on getting that done. My question is, I know you do not want to talk about activity too much yet, but you have always described growth as an output of the optimum level of activity for each basin that you operate in. Can you give us some idea what the Encino growth strategy has been and what you have assumed in your free cash flow accretion math? Yeah, Doug, appreciate the question. Thanks for joining this morning. Yeah, we actually ran a number of different scenarios because you're right. Internally, we talk about growth being an output of our ability to maintain high returns. The other thing is, you know you've been an advocate of this. The other thing that you always need to pay attention to is what's happening in the macro environment, right? Does the world actually need our barrels or our natural gas? We do see a very robust environment for North American gas demand. I think in the medium and long term, we continue to see very strong demand for oil. Obviously, there's some near-term volatility associated with what exactly happens with the potential tariff discussions. Ultimately, we ran a number of different scenarios as we incorporated Encino into our corporate level of activity. It falls right in line, like I said, with the inventory levels and the quality of the acreage that it allows us to continue to generate high returns. It increases our overall inventory level at the company level by some 20%, driving our inventory up to greater than 12 billion barrels of equivalents and not changing our corporate level return metrics at all. We could not be more excited about it. The Encino growth strategy will really now become part of the EOG story. We will balance that across our multi-basin portfolio, which really means optimizing investment in each of the assets. I know it sounds like a broken record, but we continue to focus on investing in each of those assets to make sure they improve every year. This simply gives us the scale to be able to turn this asset into a foundational member similar alongside the Permian and the Eagle Ford. Our next question comes from Scott Hanold from RBC Capital Markets. Please go ahead with your question. Yeah, hey, thanks, all. I'm going to turn to the shareholder return side of things. Ezra, I think you made a comment that you don't anticipate your shareholder return kind of activity strategy to change compared to what you've done here recently. Could you provide a little bit of context around that? Obviously, there's a fair amount of your cash balance that's going out the door. If I'm doing my quick math right, your leverage ratio moves from obviously a negative net debt position to something probably between 0 and 0.5 times. Can you give us some context more specifically on what to expect from shareholder returns over the next couple of quarters and also how you think about the leverage ratio? Yeah, hey, Scott, this is Ann. Our framework on our cash returns remains unchanged even after the transaction. As Ezra laid out, our primary method of cash return is a foundational regular dividend. We've had 27 years straight of paying a dividend, never cut or suspended. We also announced this morning that we are increasing the regular dividend 5%, and that's effective with the October quarterly dividend. If you compute that out, the new annual indicator rate is $4.08 per share. Above the regular dividends, we will remain opportunistic regarding buybacks. We remain well-positioned to return the same percentage levels of free cash flow to shareholders that we have delivered over the past several quarters. The financial strength we have in place with our balance sheet allows us to retain significant flexibility and support meaningful cash flow returns to our shareholders. As far as the debt levels, we've talked about in the past keeping our total debt to EBITDA less than one times bottom cycle prices. That continues to remain in place. We're pleased with the capital structure of the company post the transaction. We're going to manage that debt level the same way we have in the past. Again, the debt level is going to go up post-close to $7.7 billion. Again, we think that's in line with where EOG needs to be on a metric basis. Keep in mind that at the beginning of next year, we'll pay down the $750 million in debt. That will reduce it sub $7 billion. Our next question comes from Bob Brackett from Bernstein Research. Please go ahead with your question. Good morning. Could you talk to the commercial or the marketing aspects of now having a significant position in the EOG? How do you think about gas takeaway, perhaps NGL takeaway, as this asset moves towards foundation asset? Yes, Bob, thanks for the question. Like I started with, Encino's done a great job on the gas side. We have over 800 million a day of firm natural gas transport. We consider 600 million of that transfers into premium markets, or right around 70%. They have secured firm transportation on the Texas Eastern and the Tennessee gas lines. They also have exposure basically between the Gulf Coast markets, some in the Southeast markets, and they still have a little bit in the Northeast markets and the MidCon areas. We actually anticipate, like everybody else, we are forecasting growth of in-basin demand to be potentially pretty strong in the next decade, somewhere between 3-4, maybe as much as 5 BCF a day demand growth by 2032. You have also got more than likely the potential for an additional egress through one of a handful of different long-haul pipelines that are coming on. When we look at the volatile oil window, much of the transportation, the processing falls back in line with what we have already talked about with our established position. There is ample processing capacity in the basin. Of course, we are continuing to develop both Encino and EOG at the same time. We are continuing to develop exposure to multiple markets for our oil sales. Our next question comes from Scott Gruber from Citigroup. Please go ahead with your question. Yes, good morning. Congrats on the deal. You guys provided some stats on average unit of well cost and EURs on slide eight. Ezra, are those inclusive of all the anticipated costs and efficiency improvements that you outlined this morning, or would those be upside to the figures in the deck? Yeah, Scott, thanks for the question this morning. Yeah, the numbers that we're looking at there are based on Encino's versus EOG's current operations right there. What you can see is the 15% lower total well costs are what we're capturing as of today. Those are basically real-time numbers. Like I said, we continue to see a lot of upside, especially as we grow this thing to scale, that there will be additional places to continue driving down some of the costs with respect to logistics, supply chain, being able to, as we've talked about before, one of the exciting things about this transaction is it kind of advances our pace to move this asset into a foundational. We were targeting having a consistent frac spread activity by the end of this year. This will put us in a position to operate more activity, which we foresee is driving down costs. Our next question comes from Charles Mead from Johnson Rice. Please go ahead with your question. Yes, good morning, Ezra, and to the rest of your team there. Ezra, when I was looking at this deal this morning, I thought it actually bore some important resemblance to the last corporate deal you guys did, which was Yates in the Delaware. Just to hit the two dimensions of that, it's a private company in a growing basin. I'm curious if you could share your perspectives. Is that just a coincidence as far as that's the kind of corporate deal that EOG has done, or is it alternatively perhaps a deliberate design from the outset, or instead maybe kind of just a kind of a natural outgrowth of your process, kind of a signature of the way you guys think about things? Yeah, thank you, Charles. I think you're right. It's consistent with our strategy. We've always talked about the way that we value, whether it's organic leasing, small bolt-on acquisitions, or in this case, a transformative deal. It needs to be competitive on a returns basis. We look at it, we view it through a returns lens. Oftentimes that makes transactions in established basins a little bit less competitive with our existing portfolio because we've built so many things on a low cost of entry. Right off the bat, that steers you into potential transactions in emerging assets, similar to both Yates and the Utica. The second thing, like you said, is a lot of these deals end up coming about because of our reputation, which I like to think is why they end up being privately negotiated. Similar to Yates, the relationship between Encino and EOG has been growing over the last couple of years since we've been involved in the basin. See a lot of similarities and alignments between the two companies. Both companies have been working to unlock this liquids-rich portion of the Utica based on data, collection of downhole data, and application of that data to the very next pad. Ultimately, what I'd say is there are times in our company where our culture gets to a point where you start to see some significant step changes and transformative opportunities for the company. Twenty years ago, we transitioned to unconventional gas. Fifteen years ago, we transitioned to unconventional oil. We did the transformative acquisition with Yates, and we're doing the transformative acquisition today with Encino. I think it puts the company in a unique space, differentiated not only by the quality of our assets, but the multi-basin portfolio with upside on some of the best international prospects that we've ever had. Our next question comes from Paul Sankey from Sankey Research. Please go ahead with your question. Hi, good morning, everyone. Ezra, hi. Your attraction for the Utica is kind of unique to you amongst the big cap players. Can you just remind us what's so great about this play, maybe at a high-level economics level compared to, say, for example, the Delaware? That would be question one. Secondly, on the current environment, obviously, I don't need to go on about it. The timing here seems brave, if you want. Can you talk a little bit about that and the decision to use—and you highlighted it very much—not use equity here, which might have mitigated downside to price risk? Thanks, Lloyd. Thanks for the question, Paul. Yeah, the exciting thing about the Utica, as you compared it to the Delaware Basin, is at a high level the way that we think about it, the way that it kind of maps out is it has really the cost structure of the Midland Basin with the well productivity of the Delaware Basin. That is what makes it so exciting for us. In the liquids-rich window, the volatile oil window, the returns are really driven by the liquids upfront. Then you get a significant amount of NGLs, obviously, and gas coming with it. On the gas side, like we have outlined today, we see not only a strong gas play as it exists today, but we actually see a lot of upside to it, exposure now to some new and diverse markets for us, and in an area where we foresee growing demand. Regarding the timing on the transaction, this is the timing that worked out for the stakeholders involved, both Encino and EOG. We do see and recognize the near-term volatility in the oil markets. Of course, that's balanced by what we see to be a stronger momentum on the natural gas demand story in North America as we've long held that 2025 would be a bit of an inflection point for natural gas demand. What I would say is we've run, again, we modeled this transaction at a number of different scenarios, both downside pricing, mid-cycle pricing, and are very happy and very comfortable with where the returns profile of this transaction plays for. Ultimately, this is one of those things, though, where we've combined two large premier acreage positions in the Utica. We've created a third foundational play for EOG alongside the Delaware Basin and Eagle Ford assets. It really fits in and complements our top-tier multi-basin portfolio and drives a lot of shareholder value. Our next question comes from Phillip Jungwirth from BMO. Please go ahead with your question. Thanks. Good morning. When you look at the landscape of other Utica players, there's multiple inorganic opportunities from other private to small public. I was hoping you could just compare and contrast Encino versus other potential acquisition opportunities in the play. What are the key benefits that would point to in favor of Encino here? Yeah, Philip, thank you for the question. We're very happy with the footprint in the Utica as we ended up with it today. The scale post Encino, post the Encino acquisition, creates, like I said, a large foundational asset for us, over 2 billion barrels of equivalence resource across 1.1 million net acres in both the volatile oil window and gas window. The special thing about Encino is not only, like I mentioned before, that we've gotten to know the company. We've gotten to know the company in the field at an operational level, and we see a lot of similarities between the two companies and our approaches. Also, it's simply the size and scale of the asset. The team at Encino has done a great job building this asset. Like I've talked about, they've put together an impressive acreage position in the volatile oil window. They've exposed themselves to diverse markets similar to what we do in the gas window. We couldn't really be more happy combining these two companies and bringing them under the umbrella of EOG to, again, create shareholder value for everyone involved. Ladies and gentlemen, at this time, we'll be concluding today's question and answer session. I'd like to turn the floor back over to Mr. Yacob for any closing comments. Yeah, thank you. I just want to say congratulations to everyone involved in this special transaction. It's not often that a transformative event like this comes along for a company. At a high level, we will have increased production over 200,000 barrels of equivalence per day, doubled the acreage position in the Utica volatile oil window, added a tremendous option on low-cost gas with exposure to new markets, increased our regular dividend 5%, realized immediate accretion across financial metrics, and executed the transaction without using any equity and while maintaining a pristine balance sheet. Thank you for everyone's questions on the call this morning. Thank you to our shareholders for their support. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We thank you for joining. You may now disconnect.